Name this asset: in June of 2011, it had a 99.9% price crash; in April of 2013, it had an 83% price crash; in March 2020, it had a 50% price crash; and in May of 2021, it had a 53% price crash.
If you guessed bitcoin, you’d be correct.
Bitcoin is the poster-child for crypto volatility, and in its 15 years of existence, it has experienced at least eight 50% corrections. There are over 9,000 cryptocurrencies in existence, and to-date they’re considered high risk, unpredictable, and speculative investments.
But that might be about to change.
New concepts of tokenization, transparency, and real-world value could rescue cryptocurrency from its so-far stormy history and uncertain future.
To understand how things might be changing, though, we have to look at why cryptocurrencies like bitcoin are so much more volatile than traditional asset classes in the first place.
Of course, they’re affected by the same factors that drive mainstream market fluctuations, such as world events like war. But the qualities of this asset class make it far more fraught and turbulent than others.
For one thing, cryptocurrencies are still a relatively new concept, and the market is still in the price discovery phase. To some extent, investors are still coming to a consensus about fair market value.
Another reason is that the crypto market lacks clear and comprehensive regulation, partly because of the decentralized nature of blockchain–which is one of the cryptos’ selling points, but also something of an achilles heel.
Lack of transparency can lead to lack of accountability (and cryptos have been used for criminal purposes) and lack of confidence in investors.
Hence the highly speculative, “wild west” nature of the crypto markets up until this point - Its unpredictability and high-risk profile derives partly from the lack of regulation and transparency that have haunted the crypto world.
But one of the most significant reasons for crypto instability is that, in the past, these currencies have lacked any intrinsic value.
As Wanda Rich, Editor-in-Chief of Global Banking & Finance Review recently wrote, “The instability of. . .coins with little to no intrinsic value directly led to the market meltdown and consequent crypto winter.” Unmoored from any real-world assets, various cryptocurrencies’ prices have been largely determined by investor sentiment rather than some stable, outside measure of value.
Investor sentiment can also be easily manipulated, making the market highly unpredictable. To take just one example, a single 'Tweet' by Elon Musk has been shown to shift the price of certain cryptocurrencies by as much as 16.9%.
Cryptocurrencies have thus been shaky trying to stand on their own two legs with nothing underneath them.
But what if you could have all the groundbreaking features of crypto–its decentralization, accessibility, and innovativeness–plus something else called stability?
What if it was possible to lower the risk exposure while maintaining the wild growth potential of this technology?
That fantasy may be becoming a reality through a crypto called Unicoin.
Unicoin–the official cryptocurrency of the investment TV show Unicorn Hunters–was created with the explicit intention of addressing the volatility and price fluidity that typically plagues cryptocurrency. The business luminaries heading up the project are building up Unicoin’s intrinsic value by backing it with real-world assets (RWAs), including real estate, art, and equity in multiple high-growth companies.
Unicoin recently conducted the highest-valued real estate transaction involving cryptocurrencies to date, carrying out a $500 million plus property deal that involved islands in the Bahamas, paid for with the cryptocurrency Unicoin. This and similar operations have provided Unicoin with both stability and profitability.
Moreover, to combat problems of accountability and regulation, Unicoin is compliant with regulations, audited, and publically reported. They used a number of external firms for accounting and reporting to aid in transparency. They thus marry innovation and security, democratization and transparency, allowing them to redefine cryptocurrency in revolutionary ways.
“Unicoin can outperform all altcoins by creating the strongest brand in the crypto market. . .[the] crypto market is a huge market in which no players have done consistent work creating a brand,” says Alex Konanykhin, co-founder and CEO of Unicoin recently. This cryptocurrency is positioned for institutional investors and everyday citizens alike.
Unicoin stands at the forefront of “tokenization,” the process by which illiquid assets such as real estate can be turned into capital flows using blockchain technology - Basically, asset tokenization is a way to slice up a single asset’s ownership into many smaller pieces, recorded on blockchain.
Ultimately, what this means is that tokenization democratizes access to assets that otherwise would be unavailable to many people (like owning an island in the Bahamas) - Now, it’s possible for everyday investors to have fractional ownership of things like commercial real estate or fine art.
It shouldn’t surprise us that a technology as groundbreaking and volatile as cryptocurrency would bring with it new rounds of innovation....this dynamic asset class never could stay still for long.
The approach of firms like Unicoin represent the latest stage in crypto’s rapid development–and perhaps one of its most revolutionary.
The new era of cryptocurrency has arrived.
